Car dealer 1.9% financing vs Ally CD ladder

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Topic Author
BlackStrat
Posts: 311
Joined: Wed Apr 29, 2015 9:20 am

Car dealer 1.9% financing vs Ally CD ladder

Post by BlackStrat »

I have the cash to buy outright but what kind of rate difference would make it worthwhile to manage a CD ladder with a 5-year loan?
runner23
Posts: 47
Joined: Sat Oct 17, 2015 8:45 am

Re: Car dealer 1.9% financing vs Ally CD ladder

Post by runner23 »

Seems immaterial to bother. Just pay cash.
Dottie57
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Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Car dealer 1.9% financing vs Ally CD ladder

Post by Dottie57 »

runner23 wrote: Sun May 26, 2019 9:40 pm Seems immaterial to bother. Just pay cash.
+1
Katietsu
Posts: 4337
Joined: Sun Sep 22, 2013 1:48 am

Re: Car dealer 1.9% financing vs Ally CD ladder

Post by Katietsu »

I think this is the same debate as chasing credit rewards. I am regularly trying to balance simplification with optimization of bonuses, rewards, higher interest and lower fees. I tend to think in terms of how much am I making on an hourly basis and how much mental drain is involved.

I actually decided to take a 1.9% car loan and keep the funds in a 2.7 % account. I am basically breaking even when I consider taxes. So I would not do this for the money with my numbers. If you had a low enough tax rate you might be able to come out ahead enough to justify it for the cash. I made the choice because my credit score was getting dinged for no installment loans and I wanted the flexibility to go after a couple credit card bonuses and still stay in the excellent range.

I was also able to set it all up with auto payments so not much hassle for me.
Topic Author
BlackStrat
Posts: 311
Joined: Wed Apr 29, 2015 9:20 am

Re: Car dealer 1.9% financing vs Ally CD ladder

Post by BlackStrat »

I calculated a small gain with the CD 's but didn't even think about taxes.

Not worth it - thanks
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